Doing Business in China

Import Export Businesses Swimming the Trade Channel

Now that you're familiar with the players, you'll need to take a swim in the trade channel, the means by which the merchandise travels from manufacturer to end user. A manufacturer who uses a middleman who resells to the consumer is paddling around in a three-level channel of distribution. The middleman can be a merchant who purchases the goods and then resells them, or he can be an agent who acts as a broker but doesn't take title to the stuff.

Who your fellow swimmers are will depend on how you configure your trade channel, but they could include any of the following:

Manufacturer's representative: a salesperson who specializes in a type of product or line of complementary products; for example, home electronics: televisions, radios, CD players and sound systems. He often provides additional product assistance, such as warehousing and technical service.
Distributor or wholesale distributor: a company that buys the product you've imported and sells it to a retailer or other agent for further distribution until it gets to the end user
Representative: a savvy salesperson who pitches your product to wholesale or retail buyers, then passes the sale on to you; differs from a manufacturer's representative in that he doesn't necessarily specialize in a particular product or group of products
Retailer: the tail end of the trade channel where the merchandise smacks into the consumer; as yet another variation on a theme, if the end user is not Joan Q. Public but an original equipment manufacturer (OEM), then you don't need to worry about the retailer because the OEM becomes your end of the line. (Think Dell Computer purchasing a software program to pass along to its personal computer buyer as part of the goodie package.)